When You Need Speed and Flexibility
Commercial bridge loans are short-term financing designed to bridge the gap between acquisition and permanent financing. They fund the business plan — whether that's renovating units to push rents, leasing up vacant space, repositioning a property to a higher use, or acquiring a distressed asset before the competition.
Bridge lenders underwrite the deal based on where the property is going, not just where it is today. That means they'll lend against your pro forma, your renovation budget, and your ability to execute — not just trailing income. This is how value-add investors move fast and capture upside that traditional lenders won't touch.
Light Bridge vs. Heavy Bridge
Not all bridge loans are the same. The distinction between light and heavy bridge matters for pricing, leverage, and which lenders will compete for your deal.
| Feature | Light Bridge | Heavy Bridge |
|---|---|---|
| Typical Use | Minor rehab, lease-up, stabilization | Major renovation, repositioning, conversion |
| Renovation Budget | < 20% of purchase price | 20-50%+ of purchase price |
| LTC Range | 70-80% | 65-75% |
| Rate Spread | Lower (SOFR + 250-450) | Higher (SOFR + 400-700) |
| Term | 12-24 months | 18-36 months |
| Draw Structure | Often full-fund at close | Draw-based against milestones |
| Lender Pool | Broad — debt funds, banks, agencies | Narrower — specialized debt funds |
Pro tip: Light bridge deals with strong sponsors and clear exit strategies attract the most competitive pricing. If your property is 70%+ occupied and needs cosmetic upgrades, you'll see multiple term sheets within days. Heavy bridge requires more lender education — come with detailed plans, a realistic budget, and a proven track record.
How Bridge Loan Mechanics Work
Bridge loans are structured around your business plan timeline. The lender funds the acquisition and holds back renovation dollars in a future funding reserve. As you complete renovations, you draw against that reserve with documented proof of completion.
- Interest-only payments — no amortization during the bridge term, maximizing cash flow during stabilization
- Floating rate — typically SOFR-based with a spread, sometimes with a rate cap requirement
- 12-36 month initial term — with extension options (usually 6-12 months each) upon meeting milestones
- 70-80% loan-to-cost — including acquisition price plus renovation budget
- Interest reserve — many lenders allow you to capitalize interest into the loan during heavy construction periods
- Exit strategy required — every bridge lender wants to know how you're paying them off: refinance to permanent debt or sale
Ideal Scenarios for CRE Bridge
- Apartment value-add — acquire a 1970s garden-style complex, renovate units, push rents 20-30%, refinance into agency permanent
- Office lease-up — purchase a partially vacant office building below replacement cost, lease it up, stabilize NOI, refinance or sell
- Retail repositioning — convert an outdated strip center to modern mixed-use or re-tenant with credit tenants
- Hotel conversion — acquire an underperforming hotel, convert to multifamily, student housing, or senior living
What Lenders Want to See
- Detailed business plan — acquisition rationale, renovation scope, unit-by-unit or suite-by-suite plan, timeline
- Renovation budget — line-item breakdown from a qualified GC, including contingency
- Pro forma financials — projected rents, occupancy, and NOI post-stabilization with market comps to support assumptions
- Sponsor experience — track record of executing similar business plans on similar property types
- Current financials — trailing 12-month P&L, current rent roll or tenant roster, occupancy history
- Exit strategy — specific plan for payoff: permanent refinance terms, identified buyers, or both
- Sponsor liquidity — reserves to cover cost overruns, carry costs, and interest shortfalls during the business plan
Submit Your Bridge Deal
Tell us about your property, your business plan, and your experience. We'll match it to competing bridge lenders who specialize in your property type and deal size. Multiple term sheets within days, not weeks.